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In an effort to strengthen its financial position, Caesars Entertainment (NASDAQ:CZR) took a portion of its operation public via an IPO recently. The company runs the flagship Caesar’s Palace in Las Vegas, but its business includes all forms of casinos, greyhound racing, harness racing, and a thoroughbred racetrack, as well as hotel and convention space, restaurants, and non-gaming entertainment facilities.

The casinos operate primarily under the Harrahs, Caesars, and Horseshoe brand names. CZR also owns and operates the World Series of Poker tournament and brand. The empire is spread across 52 casinos in seven countries.

So why did the company need to strengthen its financial position? And what initiatives is it undertaking to do so?

To answer the first question, take a peek at the balance sheet — and try not to run away screaming.

You’ll find long-term debt of $19.7 billion. Holy snake eyes, Batman! And I thought MGM Resorts (NYSE:MGM) was headed for trouble with its $13 billion in debt. That much debt should tip you off that Caesar’s has a knife in its chest, and the wound may be fatal.

Can anything save Caesars?

Probably not. The economic recovery has been scattershot. Luxury retailers and leisure companies are doing very well, but gaming recovery has been merely modest.

Revenues in 2011 were flat for Caesars compared with 2010, and I wouldn’t expect a big increase this year. It would have to be a large increase, too, because the company lost $453 million in 2011. Remember that debt? Interest is at a rate of about 10.5%, or $2.1 billion, and EBITDA was only $1.94 billion.

So while Caesars can continue to extend its debt maturities out, unless cash flow starts inflating, the company won’t be able to meet those debt-service payments from operational cash flow. That’s not good.

Caesars is instituting many cost-saving measures, and the company is trying to get into online poker. I think the online poker gambit, if legislation makes it a reality, is the company’s best chance.

Online poker is incredibly profitable. But we aren’t there yet, so don’t get your hopes up. In the meantime, Caesars also has no exposure in Asia, where the big growth is, so it’s trying to augment local gaming instead.

The bottom line: Why bother with Caesars when you can get in on the big growth in Macau with Las Vegas Sands (NYSE:LVS) and Wynn Resorts (NASDAQ:WYNN)?

If you hold Caesars, sell it. If you’re thinking about shorting, I think that idea has merit. But remember two things: The faintest word that online poker may be legalized will drive the stock up sharply. Also, the company is still a long way from bankruptcy.